The Private Sector Has Aggressive Plans Of Capacity Addition To The Indian Power Sector Despite Facing Several Problems

Mumbai, India (PressExposure) January 12, 2009 -- Report on Developer-wise Status of Private Sector Projects ([])

India suffers from widespread shortages of electricity supply. These shortages, among others, are detrimental to the economic growth. The central sector, which was the mainstay for funding power projects, reached its saturation point. Efforts in expanding generation capacity by the state-owned electric utilities were hampered by severe resource constraints. The only solution seemed to be inviting private sector to pool in capital. It was also thought that private sector would impart a degree of efficiency through improved capacity utilisation, better operational and technical performance. Against this backdrop, to mobilize additional resources to help bridge the gap in demand and supply, the Government of India formulated a policy in 1991 with the objective to encourage greater investment by private enterprises in the electricity sector.

Since then, a number of projects were proposed and today[1], the private sector constitutes 15.1% (22246 MW) of the total installed capacity of India (146902 MW) and is expected to increase its share in subsequent plans. While the distribution across the states varies, the state of Tamil Nadu leads with the highest installed capacity of 5433 MW from the private sector followed by Maharashtra (4216 MW), Gujarat (3443 MW), Andhra Pradesh (2126 MW), Karnataka (2014 MW), Chhattisgarh (1156 MW) and West Bengal (1081 MW). Rest of the states have less than 1000 MW of privately owned installed capacity.

Despite facing a number of problems related to basic infrastructure like acquisition of land, allocation of water, coal linkages; issues related to financial closure to timely supply of power equipments, the private sector has aggressive plans of capacity addition to the Indian Power Sector. In fact during the XI Plan, over 19% (15043 MW) of the total capacity addition (78700 MW) is envisaged through the private sector. Also with the award of three Ultra Mega Power Projects to the private companies (rest six yet to be awarded) and their commitment to commission them on a fast track, the share of the private sector will only increase in the forthcoming plans.

The publisher, through this report, brings to its clients the developer-wise status of projects as received from the developers including information on Financial Closure like funds required for each stage of the project, funds tied up, FI wise commitment and disbursal status, and Pending Issues with state/central government besides other details.

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Press Release Submitted On: January 10, 2009 at 3:43 am
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